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According to several media reports, Volkswagen China layoffs are still in progress, mainly related to the imported car business, involving Volkswagen Import Automobile (China) sales Co., Ltd. (VGIC), a wholly owned subsidiary of Volkswagen (China) Investment Co., Ltd., established in November 2002 with a registered capital of 175 million yuan.

It is reported that Volkswagen China has given employees two options in this round of layoffs. The first is for Beijing to leave to work in Hefei, and the second is to lay off staff directly and give compensation to the highest Nintendo 6. It is important to note that not everyone can get Never6 compensation. The main criteria are regular employees who need to work at Volkswagen for many years.

In Anhui, Volkswagen has many subsidiaries, including CARIAD, Volkswagen Anhui, Volkswagen (China) Technology Co., Ltd. (VCTC) and so on. The reason for the transfer of employees to Hefei is that the overall focus of Volkswagen China is moving to Hefei. "[imported cars] do not sell well and do not need too much manpower support, so layoffs are normal, and the imported car business has experienced many layoffs before," said a person familiar with the matter. in the future, the imported car business may go to Volkswagen Anhui, where Volkswagen Anhui will sell the Touareg brand. "

On October 10, Volkswagen China said in response to rumors of layoffs, "this is part of its global efforts to reduce costs, and the company is continuing to improve the efficiency of various departments and projects and optimize costs." according to the actual situation, the relevant measures also involve direct labor costs and indirect labor costs, including administrative expenses, travel expenses and training costs. "

At the same time, Volkswagen China pointed out that the group launched performance plans among all its brands in 2023 to maintain success in a challenging industry situation. Volkswagen has set a clear goal of increasing efficiency by 20% by 2026. Volkswagen China, like all other departments, actively participates in and supports global performance plans, including adjusting the organizational structure, improving the digital level of workflow, and strengthening the coordination among brands and departments in China. And strengthen the localization of the project.

Volkswagen announced a "cost-cutting" campaign in December 2023, with plans to save 10 billion euros in costs by the end of 2026 and increase operating margins from 3.4 per cent to 6.5 per cent. However, the Volkswagen passenger car brand is still 2 billion to 3 billion euros short of its cost-saving target this year. Volkswagen Group (China) will make a significant contribution to this, the company said in an email. Optimization measures "may also include direct and indirect human costs", such as administration, travel and training. In mid-September, it was revealed that Volkswagen China would cut hundreds of employees in an effort to meet its goal of reducing global management costs by 20 per cent over the next three years. In response, Volkswagen Group said in an email that Volkswagen China would "make a significant contribution to this" and that the optimization work "may also include direct and indirect personnel costs", such as management, travel and training.

The Chinese market is Volkswagen's largest market in the world. The decline in the competitiveness of fuel vehicles and the unsuccessful transformation of electric vehicles have put great pressure on Volkswagen's weak sales in the Chinese market. After entering 2024, although Volkswagen joined a "price war" with Chinese automakers in the first half of the year, sales fell 7.4 per cent to just 1.35 million vehicles as its own brands accelerated to erode the joint venture market. Of course, the more the Chinese market declines, the more Volkswagen needs to maintain its market position and increase its investment in the Chinese market, mainly focused on electric cars, which may be Volkswagen's last chance to stay in the Chinese market.

"there are no more checks from China," Volkswagen CEO Obom said at a staff meeting at Wolfsburg headquarters on Sept. 4. In other words, Volkswagen's profits in the Chinese market have been upside down, it is difficult to provide Volkswagen with a considerable profit level. "the European auto industry is in a very harsh and austere situation, the economic environment is becoming more severe, and new competitors are entering the European market," Obermu said. the cake is smaller, but there are more guests at the table. " Although Volkswagen is still the world's second-largest carmaker, it is also challenged, especially in the Chinese market.

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